Contactless Payment Explained


Trips to the grocery stores or retailers in 2020 would have been unrecognizable in 2019. The COVID pandemic changed many previously innocuous practices in our businesses, seemingly overnight. But among the plastic partitions, modified hours, and supply chain nightmares, pandemic practices haven’t all been just temporary fixes. In economics, they call it ‘creative destruction’: the way that innovations get rid of the old and bring in the new. Conducting business in the era of COVID certainly required innovation, and that’s not necessarily a bad thing. And many innovations are going last a long time.

Going contactless was an essential early step in the response to the pandemic. Paying for your groceries or new furniture for your dining-room-turned-home-office without needing to exchange paper money or tap numbers into a payment machine quickly became the new standard for retailers and small business owners everywhere. 

No doubt swiping a credit or debit card is here to stay for some time. Contactless payment will not likely disappear, even when all other pandemic precautions do, because it’s great! Credit card readers that connect to your cell phone are plentiful and free for small businesses and eliminate the friction of finding cash to make a purchase.

Now, the next step in payment convenience reduces even the friction of carrying the credit card as well. For customers who have stored their credit card or banking information in their phone, they can scan your QR code and instantly be sent to your payment site of choice, possibly with the total amount due pre-entered, and pay with the tap of a button.

Wait! What's a QR code?

QR (Quick Response) codes are a matrix of horizontal and vertical lines that, when scanned, are decoded by the software on your smartphone. Depending on the command of those characters, your phone may open a browser link, confirm payment information, even verify geolocation, among other operations.Both iPhones and Android smartphones can scan QR codes directly from the main camera app. You simply open the camera and point it towards the QR code.


Ready to use contactless payment for your business? It does sound nice, doesn’t it: without the need for a cash register or cash box, your sales can happen anywhere! In your showroom, at the craft fair, on your client’s front porch. 

So let’s talk about setting up contactless payment.

You first must decide what apps you will use to accept contactless payments. While there are many options available, I will only cover the most popular here. First, let's break them down into 2 separate categories of apps you might use to accept payment with a QR code.

Category 1 is the apps that require both parties to have the same app. The most common are PayPal and Venmo (which is owned by PayPal), and there’s tons more, like Cash App and Zelle. Even Facebook and WhatsApp allow users to transfer money through their messaging platforms. Millions of customers utilize these apps in their daily lives, moving cash between family members or making a purchase. Many of these apps are directly linked to a bank account and no credit card is needed, but both parties must have the same app to exchange money.

Category 2 is apps that accept any credit and debit card payment, regardless of their preferred app. Only the merchant needs the payment app. The customer can use an app like Apple Pay, Samsung Pay, or Google Pay that stores their credit card digitally on their phone. The most common in this category is Block (formerly Square).


It isn’t. You probably have PayPal or Venmo already! And if you don’t, they are easy to download. And if you do in-person events, you most likely have a swipe card reader already. Let’s break it all down for creating your contactless payment system.

Category 1

So, for apps where both parties need the same app, here is how to activate a QR code to accept payment, and the fees associated. We’re going to focus on PayPal and Venmo, since those are the most utilized and most likely downloaded already by your customers.


    • Open the PayPal app, click the QR code icon in the top right corner, click Get Paid and Get Started.
      • Your QR code is generated. 
      • Click the pen icon to add an amount due, before the customer scans.
      • The customer scans your QR code and pays through their PayPal account.
  • Pro Tip: If customers are scanning the code on your phone, like at a craft show, you can download the QR code for various popular prices and have them ready in your phone (or even printed out) for quicker transactions.
      • PayPal currently charges a fee of 2.7% of the sale.


      • Open the Venmo app, click the QR code icon, click Venmo Me.
        • The customer can scan the QR code on your phone and enter the amount due to pay through their Venmo account.
        • Or print your QR code, add it to a frame or easel, and the customer scans your printed QR code and enters the amount due.
      • Venmo currently charges 1.9% + $0.10 per transaction.



      Category 2

      For apps where the customer pays with a digital credit or debit card in their phone, here is how to activate a QR code to accept payment, and the fees associated.

      BLOCK ( formerly Square)

      • Open your Square Mobile App, click the Keypad tab, enter Sale Amount, press REVIEW SALE, press CHARGE, click PAY WITH QR code, a QR code is displayed for the customer to scan and pay.
        • You can also click MANUAL ENTRY and enter the card number, but the fees increase.
        • The mini website option allows you to save inventory items or just common price points to save time.
        • You can also use the app to calculate change for cash sales.
        • Fees are 2.9% + $0.30 per credit card transaction
      • If you don’t have a Square account
        • Go to to set up an account.
        • Since you are accepting credit cards, the setup is a little more involved than PayPal or Venmo. You simply answer questions to set up a mini website, verify your identity, determine if you charge sales tax, and link to your business bank account.


      For those currently operating an e-commerce store on the Shopify platform, Shopify offers a variety of credit card readers. Fees are currently 2.7%, plus your Shopify plan fees. Details are here.

      For businesses using Intuit Quickbooks for accounting, Quickbooks now offers a credit card reader that will integrate automatically with their accounting software. Fees are currently 2.4% + $0.25 transaction fee. Details are here.

      Pro Tip: Review with your accountant how the new tax changes for 2022 will impact you, as third-party apps are now required to report annual sales over $600 per year to the IRS. This is related to profitable transactions only. So you need to have the transactions where your daughter pays you back for that dress (LOL) separate from selling a cutting board.



      If you’re new to using QR codes, you may have a couple questions about how secure they are. Here’s a few questions you may be asking yourself:

      Q: As a consumer, should we be concerned for the security of our credit card account numbers? Especially when there are no physical card swipes or traditional authentication methods like PINs and signatures?

      A: Contactless payments, and many swipe card payments, use a virtual token that stands in for the card numbers, which is called tokenization. Essentially, the app or POS system sends a notification to the credit card processor that this particular customer is making a purchase. The processor reads the card number through the app, and sends a unique code, or token, back to the app saying the purchase is approved. The phone with the payment app never reads the credit card number.

      Q: Do QR codes collect my personal information and data?

      A: QR code-generating software does not collect personal information. If coded to do so, they CAN collect location, and the number of times the code has been scanned.

      Q: Can someone hack a QR code?

      A: The QR codes themselves can’t be hacked, as they only store a digital destination. However, a hacker could put up a malicious QR code to send users to a fake website, so be cautious when pointing your phone’s camera at any QR code you pass by.

      Final Pro Tip: Store all your digital payment apps side by side on your phone home screen, so you can open the appropriate one in an instant.



      Safety concerns during the pandemic have accelerated customer’s willingness to pay with their phones. So now is the time to prepare your business to accept those contactless payments! While this innovation already existed, the pandemic has made them all the more popular, and you can take advantage of the more robust infrastructure developing around contactless payment.

      Secure a sale with a customer while you are walking your shop and they fall in love with a special piece. Allow your customers to pay from whatever distance they feel most comfortable. While your neighbor at the craft show is missing sales because they don’t accept credit cards, you are providing the customer with the most frictionless way to shop.

      Have other questions about building your maker brand and business? Subscribe to the Business for Makers Blog and Business for Makers Podcast for insights and tips. Tune to Sawdust Talk on IGTV Live on Wednesdays at 10 pm CST to hear from makers about their projects and business and meet some great members of the maker community.

      By the way, once you get your business name, you’ll need T-shirts to show it off! Check out to get your maker business’s name and logo on a shirt, hoodie, or hat.



      Scott Chervitz is the owner of George Supply Company, dedicated to helping woodshops build their brand. See more at You can reach him at or on Instagram at @GeorgeSupplyCompany.

      Brian Chervitz, M.S., is an Associate Instructional Designer at the University of Wisconsin Extended Campus.

      Leave a comment

      Please note, comments must be approved before they are published